Summary:
Could be more rebound at least tomorrow morning.
More signals confirming an intermediate-term top.
| Trend | Momentum | Comments - Sample for using the trend table. | |
| Long-term | Down | Idea for trading intermediate-term under primary down trend. | |
| Intermediate | Down | Neutral | |
| Short-term | Down* | Neutral |
I consider today’s drop as a follow-through of the yesterday’s Bearish Reversal. With more intermediate-term sell signals triggered and more potential topping signals, it does not look good for bulls. Very short –term, because of oversold plus a few positive divergences, so there could be more rebound at least tomorrow morning.
1.0.3 S&P 500 SPDRs (SPY 30 min), this is my main reason for the tomorrow’s rebound, oversold plus lots of positive divergences. (Noticed a potential Double Top could be in the forming. But without a breakdown bellow the neckline to confirm this indeed is a Double Top pattern, it’s not a reason to be bearish though.)
0.0.0 Signal Watch and Daily Highlights, this is the overall signals for my chart book at www.stockcharts.com. The trend following indicators are all yelling for sale, either short-term or intermediate-term. While on the other hand, all the momentum indicators are mostly deadly neutral, so I expect more pullbacks ahead. 1.3.7 Russell 3000 Dominant Price-Volume Relationships, 1501 stocks price down volume down, this is a typical continuation pattern in the bear market, so it supports for more pullback as well.
2.8.0 CBOE Options Equity Put/Call Ratio, double confirming line was broken today confirming a potential market top. This signal, ever since I found “the trend line rule” since year 2007, only went wrong once (04/20/2009 Market Recap: The rally might be over). But last time when it went wrong, it was without 2.8.3 SPX:CPCE’s confirmation. This time, however, both 2.8.0 and 2.8.3 have confirmed.
1.2.0 INDU Leads Market, INDU made a lower low today, if the past pattern illustrated on the chart still holds true then SPX will follow soon.
The following charts are for your info only:
3.1.1 PowerShares DB US Dollar Index Bullish Fund (UUP 30 min), RSI oversold plus lots of positive divergence, US$ may rebound, it’s not good for the stock market.
3.0.0 10Y T-Bill Yield, just to remind you that when yield rises, not only the stock market could be topped but also means a possible higher mortgage rate.
Performance Surrounding Memorial Day from www.sentimentrader.com.
I don't present it as well as you, but I believe we've topped (I assume you are stopping just short of calling one although it sure sounds like you have or are). The signs are everywhere. Ahhh the 4/20 fakeout, I won't ever forget that one. I'm not gonna second guess myself and reading this makes me feel like I have not lost all my marbles. Kenny and Dan seem to believe there is a possibility of one move higher. They both seem fixated on the SPX and the 200ma and the top BB all coming together. To me the daily and weekly indicators are "beyond limits" at this point and a whipsaw may be orchestrated, but I just don't see it. Thanks for all your excellent work. I learn something new everytime I visit.
ReplyDeleteShanky
thanks cobra, your analysis rocks!
ReplyDeletenice title
ReplyDelete;o)
expect a move back to 900 to confirm previous support as now resistance. Good place to make your short bets.
ReplyDeleteGood luck
Hi Cobra,
ReplyDeleteMany thanks again for the excellent work.
As per the N vs N rule, we should be buying right..?
thanks
Cobra,
ReplyDeleteAny thoughts on the move in gold and silver in conjunction with this pullback?
Accroding to N vs N, no we shouldn't buy now.
ReplyDeleteKalkgrun, I think gold will be up. I might post something this weekend about the gold.
Dear Cobra,
ReplyDeleteWould you say nothing new has come out of today considering the flatness and low volume? Would you think holding BGZ over the long weekend isn't too risky?
Or should a guy wait until Tuesday?
Thank you,
-A.
Any action today can be discarded I guess due to the holiday volume.
ReplyDeleteStatistically, next Tuesday is more likely a down day. So if today eventually closes in green (which means oversold signals are fixed), I might think it's OK to hold some short for the weekend.